Regardless of the Property Type, the Two Measures That Have

question 15

Multiple Choice

Regardless of the property type, the two measures that have been found to be key indicators of the potential credit performance are the ________.

• A) debt-to-equity leverage ratio and the loan-to-value ratio.
• B) debt-to-service coverage ratio and the loan-to-value ratio.
• C) debt-to-service coverage ratio and the value-to-loan ratio.
• D) debt-to-equity leverage ratio and the value-to-loan ratio.

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Definitions:

Consolidation

The process of combining the financial statements of a parent company with those of its subsidiaries, to present accounts as if the group were a single entity.

Adjustments

Changes made to preliminary financial statement figures to correct errors, account for prepayments, accruals, or to reflect a more accurate representation of the financial position.

Acquisition Method

An accounting technique used in consolidating the financial statements of a group in which a new acquisition is included.

Business Combinations

Transactions in which one entity gains control over one or more other businesses, including mergers, purchases of net assets, and consolidations.